Details of the new package will be outlined in Carpetright's annual report, but the company said he would get no payment for making the switch. "There's no fat-cattery here," said a spokesman.

Darren Shapland, Carpetright's finance director, said the move aimed to bring the company into line with best corporate governance practices. However, he admitted that Lord Harris, 61, had no plans to split his role of chairman and chief executive.

Mr Shapland said: "Shareholders have not complained to us about Lord Harris' contract or his role. Lord Harris has always said he will remain chairman and chief executive and this is unlikely to change until he retires at 65. We also have a strong board of non-executives to provide a counter-balance."

The shares, which have nearly doubled over the past 12 months, closed up 3 to £10.31p, after the country's largest floor covering group said it was on track to meet full-year profits forecasts.